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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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1-11037
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06-1249050
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(Commission File Number)
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(IRS Employer Identification No.)
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10 Riverview Drive, DANBURY, CT
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06810-6268
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(Address of principal executive offices)
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(Zip Code)
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INDEX
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PART I - FINANCIAL INFORMATION
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Quarter Ended June 30,
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2018
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|
2017
|
||||
SALES
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$
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3,061
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|
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$
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2,834
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Cost of sales, exclusive of depreciation and amortization
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1,723
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|
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1,599
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Selling, general and administrative
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307
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305
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Depreciation and amortization
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311
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292
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Research and development
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24
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23
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Transaction costs and other charges
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24
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15
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Other income (expense) - net
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17
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6
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OPERATING PROFIT
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689
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606
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Interest expense - net
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44
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38
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Net pension and OPEB cost (benefit), excluding service cost
|
2
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2
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INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS
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643
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566
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Income taxes
|
158
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157
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INCOME BEFORE EQUITY INVESTMENTS
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485
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409
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Income from equity investments
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14
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11
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NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
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499
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420
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Less: noncontrolling interests
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(19
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)
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(14
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)
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NET INCOME - PRAXAIR, INC.
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$
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480
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$
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406
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PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
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Basic earnings per share
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$
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1.67
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$
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1.42
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Diluted earnings per share
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$
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1.65
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$
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1.41
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Cash dividends per share
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$
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0.825
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$
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0.7875
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WEIGHTED AVERAGE SHARES OUTSTANDING (000’s):
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Basic shares outstanding
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287,803
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286,090
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Diluted shares outstanding
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290,908
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288,535
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Six months ended June 30,
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2018
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2017
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SALES
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$
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6,060
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$
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5,562
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Cost of sales, exclusive of depreciation and amortization
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3,400
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3,148
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Selling, general and administrative
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617
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595
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Depreciation and amortization
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622
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579
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Research and development
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48
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|
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46
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Transaction costs and other charges
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43
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21
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Other income (expense) - net
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12
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—
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OPERATING PROFIT
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1,342
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1,173
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Interest expense - net
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90
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79
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Net pension and OPEB cost (benefit), excluding service cost
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4
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(13
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)
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INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS
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1,248
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1,107
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Income taxes
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306
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306
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INCOME BEFORE EQUITY INVESTMENTS
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942
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801
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Income from equity investments
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29
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23
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NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
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971
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824
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Less: noncontrolling interests
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(29
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)
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(29
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)
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NET INCOME - PRAXAIR, INC.
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$
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942
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$
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795
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PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
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Basic earnings per share
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$
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3.27
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$
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2.78
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Diluted earnings per share
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$
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3.24
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$
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2.76
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Cash dividends per share
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$
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1.65
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$
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1.575
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WEIGHTED AVERAGE SHARES OUTSTANDING (000’s):
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Basic shares outstanding
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287,654
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285,799
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Diluted shares outstanding
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290,926
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288,067
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Quarter Ended June 30,
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2018
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2017
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NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
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$
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499
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$
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420
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OTHER COMPREHENSIVE INCOME (LOSS)
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Translation adjustments:
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Foreign currency translation adjustments
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(640
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)
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(1
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)
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Income taxes
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(3
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)
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55
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Translation adjustments
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(643
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)
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54
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Funded status - retirement obligations (Note 11):
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Retirement program remeasurements
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(9
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)
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(17
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)
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Reclassifications to net income
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17
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16
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Income taxes
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(2
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)
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1
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Funded status - retirement obligations
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6
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—
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Derivative instruments (Note 6):
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Current quarter unrealized gain (loss)
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—
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1
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Reclassifications to net income
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—
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—
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Income taxes
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—
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(1
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)
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Derivative instruments
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—
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—
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TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
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(637
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)
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54
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COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS)
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(138
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)
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474
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Less: noncontrolling interests
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2
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(27
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)
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COMPREHENSIVE INCOME (LOSS) - PRAXAIR, INC.
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$
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(136
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)
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$
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447
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Six months ended June 30,
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||||||
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2018
|
|
2017
|
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NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
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$
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971
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$
|
824
|
|
|
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OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
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Translation adjustments:
|
|
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|
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Foreign currency translation adjustments
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(534
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)
|
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316
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|
||
Income taxes
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6
|
|
|
58
|
|
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Translation adjustments
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(528
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)
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374
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|
||
Funded status - retirement obligations (Note 11):
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|
|
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Retirement program remeasurements
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(8
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)
|
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(20
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)
|
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Reclassifications to net income
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34
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|
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20
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Income taxes
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(6
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)
|
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—
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Funded status - retirement obligations
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20
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—
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Derivative instruments (Note 6):
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|
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Current period unrealized gain (loss)
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—
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|
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—
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Reclassifications to net income
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—
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|
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—
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Income taxes
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—
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|
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—
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Derivative instruments
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—
|
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—
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TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
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(508
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)
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374
|
|
||
|
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COMPREHENSIVE INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
463
|
|
|
1,198
|
|
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Less: noncontrolling interests
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(19
|
)
|
|
(47
|
)
|
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COMPREHENSIVE INCOME - PRAXAIR, INC.
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$
|
444
|
|
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$
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1,151
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June 30, 2018
|
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December 31, 2017
|
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ASSETS
|
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Cash and cash equivalents
|
$
|
479
|
|
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$
|
617
|
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Accounts receivable - net
|
1,877
|
|
|
1,804
|
|
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Inventories
|
606
|
|
|
614
|
|
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Prepaid and other current assets
|
202
|
|
|
250
|
|
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TOTAL CURRENT ASSETS
|
3,164
|
|
|
3,285
|
|
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Property, plant and equipment (less accumulated depreciation of $13,821 in 2018 and $13,819 in 2017)
|
11,701
|
|
|
12,057
|
|
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Goodwill
|
3,200
|
|
|
3,233
|
|
||
Other intangible assets - net
|
525
|
|
|
553
|
|
||
Other long-term assets
|
1,246
|
|
|
1,308
|
|
||
TOTAL ASSETS
|
$
|
19,836
|
|
|
$
|
20,436
|
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LIABILITIES AND EQUITY
|
|
|
|
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Accounts payable
|
$
|
967
|
|
|
$
|
972
|
|
Short-term debt
|
250
|
|
|
238
|
|
||
Current portion of long-term debt
|
979
|
|
|
979
|
|
||
Other current liabilities
|
1,083
|
|
|
1,118
|
|
||
TOTAL CURRENT LIABILITIES
|
3,279
|
|
|
3,307
|
|
||
Long-term debt
|
7,229
|
|
|
7,783
|
|
||
Other long-term liabilities
|
2,786
|
|
|
2,824
|
|
||
TOTAL LIABILITIES
|
13,294
|
|
|
13,914
|
|
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Commitments and contingencies (Note 12)
|
|
|
|
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Redeemable noncontrolling interests (Note 14)
|
14
|
|
|
11
|
|
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Praxair, Inc. Shareholders’ Equity:
|
|
|
|
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Common stock $0.01 par value, authorized - 800,000,000 shares, issued 2018 and 2017 - 383,230,625 shares
|
4
|
|
|
4
|
|
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Additional paid-in capital
|
4,066
|
|
|
4,084
|
|
||
Retained earnings
|
13,690
|
|
|
13,224
|
|
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Accumulated other comprehensive income (loss) (Note 14)
|
(4,596
|
)
|
|
(4,098
|
)
|
||
Less: Treasury stock, at cost (2018 - 95,654,841 shares and 2017 - 96,453,634 shares)
|
(7,137
|
)
|
|
(7,196
|
)
|
||
Total Praxair, Inc. Shareholders’ Equity
|
6,027
|
|
|
6,018
|
|
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Noncontrolling interests
|
501
|
|
|
493
|
|
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TOTAL EQUITY
|
6,528
|
|
|
6,511
|
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TOTAL LIABILITIES AND EQUITY
|
$
|
19,836
|
|
|
$
|
20,436
|
|
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Six months ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
OPERATIONS
|
|
|
|
||||
Net income - Praxair, Inc.
|
$
|
942
|
|
|
$
|
795
|
|
Noncontrolling interests
|
29
|
|
|
29
|
|
||
Net income (including noncontrolling interests)
|
971
|
|
|
824
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Transaction costs and other charges, net of payments
|
15
|
|
|
17
|
|
||
Depreciation and amortization
|
622
|
|
|
579
|
|
||
Deferred income taxes
|
10
|
|
|
48
|
|
||
Share-based compensation
|
21
|
|
|
28
|
|
||
Working capital:
|
|
|
|
||||
Accounts receivable
|
(147
|
)
|
|
(95
|
)
|
||
Inventory
|
(10
|
)
|
|
(5
|
)
|
||
Prepaid and other current assets
|
25
|
|
|
(40
|
)
|
||
Payables and accruals
|
(6
|
)
|
|
(24
|
)
|
||
Pension contributions
|
(10
|
)
|
|
(6
|
)
|
||
Long-term assets, liabilities and other
|
(13
|
)
|
|
85
|
|
||
Net cash provided by operating activities
|
1,478
|
|
|
1,411
|
|
||
INVESTING
|
|
|
|
||||
Capital expenditures
|
(676
|
)
|
|
(652
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(2
|
)
|
||
Divestitures and asset sales
|
69
|
|
|
17
|
|
||
Net cash used for investing activities
|
(607
|
)
|
|
(637
|
)
|
||
FINANCING
|
|
|
|
||||
Short-term debt borrowings (repayments) - net
|
13
|
|
|
(157
|
)
|
||
Long-term debt borrowings
|
—
|
|
|
10
|
|
||
Long-term debt repayments
|
(505
|
)
|
|
(158
|
)
|
||
Issuances of common stock
|
44
|
|
|
70
|
|
||
Purchases of common stock
|
(1
|
)
|
|
(11
|
)
|
||
Cash dividends - Praxair, Inc. shareholders
|
(474
|
)
|
|
(450
|
)
|
||
Noncontrolling interest transactions and other
|
(22
|
)
|
|
(84
|
)
|
||
Net cash provided by (used for) financing activities
|
(945
|
)
|
|
(780
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(64
|
)
|
|
17
|
|
||
Change in cash and cash equivalents
|
(138
|
)
|
|
11
|
|
||
Cash and cash equivalents, beginning-of-period
|
617
|
|
|
524
|
|
||
Cash and cash equivalents, end-of-period
|
$
|
479
|
|
|
$
|
535
|
|
•
|
Revenue Recognition
– In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. Effective January 1, 2018, Praxair has adopted this guidance using the modified retrospective transition method. No material differences in revenue recognition accounting were identified under the new guidance compared with the Company's historic revenue recognition accounting (see Note 15).
|
•
|
Classification of Certain Cash Receipts and Cash Payments
– In August 2016, the FASB issued updated guidance on the classification of certain cash receipts and cash payments within the statement of cash flows. The update provides accounting guidance for specific cash flow issues with the objective of reducing diversity in practice. The adoption of this guidance did not have a material impact on the financial statements.
|
•
|
Intra-Entity Asset Transfers
– In October 2016, the FASB issued updated guidance for income tax accounting of intra-entity transfers of assets other than inventory. The update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period when the transfer occurs. The adoption of this guidance did not have a material impact on the financial statements.
|
•
|
Pension Costs
- In March 2017, the FASB issued updated guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires the service cost component be reported in the same line item or items as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and not included within operating profit. This guidance was adopted in the first quarter 2018. Accordingly, non-service related components of net periodic pension and postretirement benefit costs were reclassified out of "Operating Profit" to "Net pension and OPEB cost (benefit), excluding service cost" using the practical expedient to use the amounts disclosed in the retirement benefits note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements (see Note 11).
|
•
|
Leases –
In February 2016, the FASB issued updated guidance on the accounting and financial statement presentation of leases. The new guidance requires lessees to recognize a right-of-use asset and lease liability for all leases, except those that meet certain scope exceptions, and would require expanded quantitative and qualitative disclosures. This guidance will be effective for Praxair beginning in the first quarter 2019 and requires companies to transition using a modified retrospective approach. Praxair is in the process of implementing the new guidance and will provide updates on the expected impact to Praxair in future filings, as appropriate.
|
•
|
Credit Losses on Financial Instruments
–
In June 2016, the FASB issued an update on the measurement of credit losses. The guidance introduces a new accounting model for expected credit losses on financial instruments, including trade receivables, based on estimates of current expected credit losses. This guidance will be effective for Praxair beginning in the first quarter 2020, with early adoption permitted beginning in the first quarter 2019 and requires companies to apply the change in accounting on a prospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.
|
•
|
Simplifying the Test for Goodwill Impairment
– In January 2017, the FASB issued updated guidance on the measurement of goodwill. The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The guidance will be effective for Praxair beginning in the first quarter 2020. Praxair does not expect this guidance to have a material impact.
|
•
|
Derivatives and Hedging
- In August 2017, the FASB issued updated guidance on accounting for hedging activities. The new guidance changes both the designation and measurement for qualifying hedging relationships and the presentation of hedge results. This guidance will be effective for Praxair beginning in the first quarter 2019, with early adoption optional. Praxair is currently evaluating the impact this update will have on our consolidated financial statements.
|
•
|
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
– In February 2018, the FASB issued updated guidance which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This new guidance will be effective for Praxair beginning in the first quarter 2019 on a retrospective basis, with early adoption optional. Praxair is currently assessing the impact and timing of adoption.
|
(Millions of dollars)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Inventories
|
|
|
|
||||
Raw materials and supplies
|
$
|
222
|
|
|
$
|
224
|
|
Work in process
|
54
|
|
|
57
|
|
||
Finished goods
|
330
|
|
|
333
|
|
||
Total inventories
|
$
|
606
|
|
|
$
|
614
|
|
(Millions of dollars)
|
June 30,
2018 |
|
December 31,
2017 |
||||
SHORT-TERM
|
|
|
|
||||
Commercial paper and U.S. bank borrowings
|
$
|
214
|
|
|
$
|
202
|
|
Other bank borrowings (primarily international)
|
36
|
|
|
36
|
|
||
Total short-term debt
|
250
|
|
|
238
|
|
||
LONG-TERM (a)
|
|
|
|
||||
U.S. borrowings (U.S. dollar denominated unless otherwise noted)
|
|
|
|
||||
1.20% Notes due 2018 (b)
|
—
|
|
|
498
|
|
||
1.25% Notes due 2018 (c)
|
474
|
|
|
475
|
|
||
1.90% Notes due 2019
|
500
|
|
|
500
|
|
||
4.50% Notes due 2019
|
599
|
|
|
599
|
|
||
1.50% Euro-denominated notes due 2020
|
699
|
|
|
717
|
|
||
2.25% Notes due 2020
|
299
|
|
|
299
|
|
||
4.05% Notes due 2021
|
498
|
|
|
498
|
|
||
3.00% Notes due 2021
|
498
|
|
|
497
|
|
||
2.45% Notes due 2022
|
598
|
|
|
598
|
|
||
2.20% Notes due 2022
|
498
|
|
|
498
|
|
||
2.70% Notes due 2023
|
498
|
|
|
498
|
|
||
1.20% Euro-denominated notes due 2024
|
640
|
|
|
658
|
|
||
2.65% Notes due 2025
|
398
|
|
|
397
|
|
||
1.625% Euro-denominated notes due 2025
|
578
|
|
|
594
|
|
||
3.20% Notes due 2026
|
725
|
|
|
725
|
|
||
3.55% Notes due 2042
|
662
|
|
|
662
|
|
||
Other
|
10
|
|
|
12
|
|
||
International bank borrowings
|
30
|
|
|
33
|
|
||
Obligations under capital leases
|
4
|
|
|
4
|
|
||
|
8,208
|
|
|
8,762
|
|
||
Less: current portion of long-term debt
|
(979
|
)
|
|
(979
|
)
|
||
Total long-term debt
|
7,229
|
|
|
7,783
|
|
||
Total debt
|
$
|
8,458
|
|
|
$
|
9,000
|
|
(a)
|
Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable.
|
(b)
|
In March 2018, Praxair repaid
$500 million
of 1.20% notes that became due.
|
(c)
|
June 30, 2018
and
December 31, 2017
include a
$1 million
fair value decrease and a less than
$1 million
increase, respectively, related to hedge accounting. See Note 6 for additional information.
|
|
|
|
|
|
Fair Value
|
||||||||||||||||||
|
Notional Amounts
|
|
Assets
|
|
Liabilities
|
||||||||||||||||||
(Millions of dollars)
|
June 30,
2018 |
|
December 31,
2017 |
|
June 30,
2018 |
|
December 31,
2017 |
|
June 30,
2018 |
|
December 31,
2017 |
||||||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet items (a)
|
$
|
2,266
|
|
|
$
|
2,693
|
|
|
$
|
6
|
|
|
$
|
16
|
|
|
$
|
25
|
|
|
$
|
16
|
|
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet items (a)
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Forecasted purchases (a)
|
2
|
|
|
4
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps (a)
|
475
|
|
|
475
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Total Hedges
|
$
|
477
|
|
|
$
|
517
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Total Derivatives
|
$
|
2,743
|
|
|
$
|
3,210
|
|
|
$
|
6
|
|
|
$
|
17
|
|
|
$
|
26
|
|
|
$
|
18
|
|
(a)
|
Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.
|
|
Year
Terminated
|
|
Original
Gain /
(Loss)
|
|
Unrecognized Gain / (Loss) (a)
|
||||||||
(Millions of dollars)
|
June 30,
2018 |
|
December 31,
2017 |
||||||||||
Treasury Rate Locks
|
|
|
|
|
|
|
|
||||||
Underlying debt instrument:
|
|
|
|
|
|
|
|
||||||
$500 million 2.20% fixed-rate notes that mature in 2022 (b)
|
2012
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
$500 million 3.00% fixed-rate notes that mature in 2021 (b)
|
2011
|
|
(11
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|||
$600 million 4.50% fixed-rate notes that mature in 2019 (b)
|
2009
|
|
16
|
|
|
2
|
|
|
3
|
|
|||
Total - pre-tax
|
|
|
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
||
Less: income taxes
|
|
|
|
|
1
|
|
|
1
|
|
||||
After- tax amounts
|
|
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
(a)
|
The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income (“AOCI”) and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact on the company’s consolidated statements of income and AOCI for current period gain (loss) recognition.
|
(b)
|
The notional amount of the treasury rate lock contracts are equal to the underlying debt instrument with the exception of the treasury rate lock contract entered into to hedge the
$600 million
4.50%
fixed-rate notes that mature in 2019. The notional amount of this contract was
$500 million
.
|
|
Amount of Pre-Tax Gain (Loss)
Recognized in Earnings *
|
||||||||||||||
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Millions of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
||||||||
Currency contracts:
|
|
|
|
|
|
|
|
||||||||
Balance sheet items
|
|
|
|
|
|
|
|
||||||||
Debt-related
|
$
|
(68
|
)
|
|
$
|
30
|
|
|
$
|
(32
|
)
|
|
$
|
109
|
|
Other balance sheet items
|
(1
|
)
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Total
|
$
|
(69
|
)
|
|
$
|
31
|
|
|
$
|
(31
|
)
|
|
$
|
111
|
|
|
Quarter Ended
|
||||||||||||||
|
Amount of Gain (Loss)
Recognized in AOCI |
|
Amount of Gain (Loss)
Reclassified from AOCI to the Consolidated Statement of Income |
||||||||||||
(Millions of dollars)
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
Currency contracts:
|
|
|
|
|
|
|
|
||||||||
Balance sheet items
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forecasted purchases
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Interest rate contracts:
|
|
|
|
|
|
|
|
||||||||
Treasury rate lock contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total - pre tax
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Less: income taxes
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Total - Net of Taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Six Months Ended
|
||||||||||||||
|
Amount of Gain (Loss)
Recognized in AOCI |
|
Amount of Gain (Loss)
Reclassified from AOCI to the Consolidated Statement of Income |
||||||||||||
(Millions of dollars)
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
Currency contracts:
|
|
|
|
|
|
|
|
||||||||
Balance sheet items
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Forecasted purchases
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Interest rate contracts:
|
|
|
|
|
|
|
|
||||||||
Treasury rate lock contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total - pre tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Less: income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total - Net of Taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
(Millions of dollars)
|
June 30,
2018 |
|
December 31,
2017 |
|
June 30,
2018 |
|
December 31,
2017 |
|
June 30,
2018 |
|
December 31,
2017 |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
—
|
|
|
$
|
6
|
|
|
$
|
17
|
|
|
—
|
|
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
—
|
|
|
$
|
26
|
|
|
$
|
18
|
|
|
—
|
|
|
—
|
|
|
Quarter Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
2018
|
|
2017
|
||||||||
Numerator (Millions of dollars)
|
|
|
|
|
|
|
||||||||
Net income - Praxair, Inc.
|
$
|
480
|
|
|
$
|
406
|
|
$
|
942
|
|
|
$
|
795
|
|
Denominator (Thousands of shares)
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
287,467
|
|
|
285,719
|
|
287,321
|
|
|
285,429
|
|
||||
Shares earned and issuable under compensation plans
|
336
|
|
|
371
|
|
333
|
|
|
370
|
|
||||
Weighted average shares used in basic earnings per share
|
287,803
|
|
|
286,090
|
|
287,654
|
|
|
285,799
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
|
||||||||
Stock options and awards
|
3,105
|
|
|
2,445
|
|
3,272
|
|
|
2,268
|
|
||||
Weighted average shares used in diluted earnings per share
|
290,908
|
|
|
288,535
|
|
290,926
|
|
|
288,067
|
|
||||
Basic Earnings Per Share
|
$
|
1.67
|
|
|
$
|
1.42
|
|
$
|
3.27
|
|
|
$
|
2.78
|
|
Diluted Earnings Per Share
|
$
|
1.65
|
|
|
$
|
1.41
|
|
$
|
3.24
|
|
|
$
|
2.76
|
|
(Millions of dollars)
|
North
America
|
|
South
America
|
|
Europe
|
|
Asia
|
|
Surface
Technologies
|
|
Total
|
||||||||||||
Balance, December 31, 2017
|
$
|
2,202
|
|
|
$
|
129
|
|
|
$
|
698
|
|
|
$
|
61
|
|
|
$
|
143
|
|
|
$
|
3,233
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase adjustments & other
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||||
Foreign currency translation
|
(7
|
)
|
|
(22
|
)
|
|
(12
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(45
|
)
|
||||||
Balance, June 30, 2018
|
$
|
2,207
|
|
|
$
|
107
|
|
|
$
|
686
|
|
|
$
|
60
|
|
|
$
|
140
|
|
|
$
|
3,200
|
|
(Millions of dollars)
|
Customer &
License/Use
Agreements
|
|
Non-compete
Agreements
|
|
Patents &
Other
|
|
Total
|
||||||||
Cost:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2017
|
$
|
772
|
|
|
$
|
28
|
|
|
$
|
52
|
|
|
$
|
852
|
|
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency translation
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||
Other*
|
(20
|
)
|
|
(5
|
)
|
|
—
|
|
|
(25
|
)
|
||||
Balance, June 30, 2018
|
$
|
746
|
|
|
$
|
23
|
|
|
$
|
52
|
|
|
$
|
821
|
|
Less: Accumulated amortization
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2017
|
$
|
(260
|
)
|
|
$
|
(18
|
)
|
|
$
|
(21
|
)
|
|
$
|
(299
|
)
|
Amortization expense
|
(19
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(23
|
)
|
||||
Foreign currency translation
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Other*
|
19
|
|
|
5
|
|
|
—
|
|
|
24
|
|
||||
Balance, June 30, 2018
|
$
|
(258
|
)
|
|
$
|
(15
|
)
|
|
$
|
(23
|
)
|
|
$
|
(296
|
)
|
Net balance at June 30, 2018
|
$
|
488
|
|
|
$
|
8
|
|
|
$
|
29
|
|
|
$
|
525
|
|
|
Six months ended June 30,
|
||||
|
2018
|
|
2017
|
||
Dividend yield
|
2.1
|
%
|
|
2.7
|
%
|
Volatility
|
14.4
|
%
|
|
14.0
|
%
|
Risk-free interest rate
|
2.67
|
%
|
|
2.13
|
%
|
Expected term years
|
5
|
|
|
6
|
|
|
Number of
Options (000’s)
|
|
Average
Exercise Price
|
|
Average
Remaining
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2018
|
10,787
|
|
|
$
|
108.70
|
|
|
|
|
|
||
Granted
|
1,625
|
|
|
154.00
|
|
|
|
|
|
|||
Exercised
|
(1,136
|
)
|
|
92.29
|
|
|
|
|
|
|||
Cancelled or Expired
|
(35
|
)
|
|
126.27
|
|
|
|
|
|
|||
Outstanding at June 30, 2018
|
11,241
|
|
|
116.86
|
|
|
6.3
|
|
$
|
464
|
|
|
Exercisable at June 30, 2018
|
7,521
|
|
|
$
|
110.02
|
|
|
5.2
|
|
$
|
362
|
|
|
Performance-Based
|
|
Restricted Stock
|
||||||||||
|
Number of
Shares
(000’s)
|
|
Average
Grant Date
Fair Value
|
|
Number of
Shares
(000’s)
|
|
Average
Grant Date
Fair Value
|
||||||
Non-vested at January 1, 2018
|
665
|
|
|
$
|
113.40
|
|
|
264
|
|
|
$
|
107.56
|
|
Granted
|
—
|
|
|
—
|
|
|
269
|
|
|
144.79
|
|
||
Vested
|
(78
|
)
|
|
119.98
|
|
|
(89
|
)
|
|
116.29
|
|
||
Cancelled and Forfeited
|
(150
|
)
|
|
110.12
|
|
|
(14
|
)
|
|
92.93
|
|
||
Non-vested at June 30, 2018
|
437
|
|
|
$
|
110.02
|
|
|
430
|
|
|
$
|
129.49
|
|
|
Quarter Ended June 30,
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||
|
Pensions
|
|
OPEB
|
|
|
Pensions
|
|
OPEB
|
||||||||||||||||||||||||
(Millions of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
Amount recognized in Operating Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Service cost
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
|
$
|
24
|
|
|
$
|
23
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Amount recognized in Net pension and OPEB cost (benefit), excluding service cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest cost
|
25
|
|
|
25
|
|
|
1
|
|
|
1
|
|
|
|
51
|
|
|
51
|
|
|
2
|
|
|
2
|
|
||||||||
Expected return on plan assets
|
(41
|
)
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
|
(83
|
)
|
|
(80
|
)
|
|
—
|
|
|
—
|
|
||||||||
Net amortization and deferral
|
18
|
|
|
17
|
|
|
(1
|
)
|
|
(1
|
)
|
|
|
36
|
|
|
34
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||||
Curtailment gain (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
||||||||
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
(18
|
)
|
Net periodic benefit cost (benefit)
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
|
$
|
28
|
|
|
$
|
28
|
|
|
$
|
1
|
|
|
$
|
(16
|
)
|
•
|
During May 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to settle certain federal tax disputes at reduced amounts. During the 2009 third quarter, Praxair decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the Refis Program, subject to final calculation and review by the Brazilian federal government. The Company recorded estimated liabilities based on the terms of the Refis Program. Since 2009, Praxair has been unable to reach final agreement on the calculations and initiated litigation against the government in an attempt to resolve certain items. Open issues relate to the following matters: (i) application of cash deposits and net operating loss carryforwards to satisfy obligations, and (ii) the amount of tax reductions available under the Refis Program. It is difficult to estimate the timing of resolution of legal matters in Brazil.
|
•
|
At
June 30, 2018
the most significant non-income and income tax claims in Brazil, after enrollment in the Refis Program, relate to state VAT tax matters and a federal income tax matter where the taxing authorities are challenging the tax rate that should be applied to income generated by a subsidiary company. The total estimated exposure relating to such claims, including interest and penalties, as appropriate, is approximately
$210 million
. Praxair has not recorded any liabilities related to such claims based on management judgments, after considering judgments and opinions of outside counsel. Because litigation in Brazil historically takes many years to resolve, it is very difficult to estimate the timing of resolution of these matters; however, it is possible that certain of these matters may be resolved within the near term. The company is vigorously defending against the proceedings.
|
•
|
On September 1, 2010, CADE (Brazilian Administrative Council for Economic Defense) announced alleged anticompetitive activity on the part of five industrial gas companies in Brazil and imposed fines on all five companies. Originally, CADE imposed a civil fine of
R$2.2 billion
Brazilian reais (
US$570 million
) against White Martins, the Brazil-based subsidiary of Praxair, Inc. In response to a motion for clarification, the fine was reduced to
R$1.7 billion
Brazilian reais (
US$440 million
) due to a calculation error made by CADE. The amount of the fine is subject to indexation using SELIC. On September 2, 2010, Praxair issued a press release and filed a report on Form 8-K rejecting all claims and stating that the fine represents a gross and arbitrary disregard of Brazilian law.
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Millions of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
SALES
(a)
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
1,594
|
|
|
$
|
1,505
|
|
|
$
|
3,157
|
|
|
$
|
2,963
|
|
Europe
|
444
|
|
|
383
|
|
|
872
|
|
|
739
|
|
||||
South America
|
349
|
|
|
373
|
|
|
714
|
|
|
742
|
|
||||
Asia
|
502
|
|
|
422
|
|
|
978
|
|
|
817
|
|
||||
Surface Technologies
|
172
|
|
|
151
|
|
|
339
|
|
|
301
|
|
||||
Total sales
|
$
|
3,061
|
|
|
$
|
2,834
|
|
|
$
|
6,060
|
|
|
$
|
5,562
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Millions of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
OPERATING PROFIT
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
432
|
|
|
$
|
378
|
|
|
$
|
838
|
|
|
$
|
735
|
|
Europe
|
87
|
|
|
74
|
|
|
167
|
|
|
141
|
|
||||
South America
|
56
|
|
|
64
|
|
|
110
|
|
|
112
|
|
||||
Asia
|
107
|
|
|
80
|
|
|
211
|
|
|
155
|
|
||||
Surface Technologies
|
31
|
|
|
25
|
|
|
59
|
|
|
51
|
|
||||
Segment operating profit
|
713
|
|
|
621
|
|
|
1,385
|
|
|
1,194
|
|
||||
Transaction costs and other charges (Note 2)
|
(24
|
)
|
|
(15
|
)
|
|
(43
|
)
|
|
(21
|
)
|
||||
Total operating profit
|
$
|
689
|
|
|
$
|
606
|
|
|
$
|
1,342
|
|
|
$
|
1,173
|
|
(a)
|
Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material.
|
|
Quarter Ended June 30,
|
||||||||||||||||||||||
(Millions of dollars)
|
2018
|
|
2017
|
||||||||||||||||||||
Activity
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
Balance, beginning of period
|
$
|
6,368
|
|
|
$
|
516
|
|
|
$
|
6,884
|
|
|
$
|
5,529
|
|
|
$
|
436
|
|
|
$
|
5,965
|
|
Net income (a)
|
480
|
|
|
18
|
|
|
498
|
|
|
406
|
|
|
13
|
|
|
419
|
|
||||||
Other comprehensive income (loss)
|
(616
|
)
|
|
(21
|
)
|
|
(637
|
)
|
|
41
|
|
|
13
|
|
|
54
|
|
||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Additions (reductions)
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||||
Dividends and other capital changes
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
|
—
|
|
|
(16
|
)
|
|
(16
|
)
|
||||||
Redemption value adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends to Praxair, Inc. common stock holders ($0.825 per share in 2018 and $0.7875 per share in 2017)
|
(237
|
)
|
|
—
|
|
|
(237
|
)
|
|
(225
|
)
|
|
—
|
|
|
(225
|
)
|
||||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
For the dividend reinvestment and stock purchase plan
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
For employee savings and incentive plans
|
15
|
|
|
—
|
|
|
15
|
|
|
39
|
|
|
—
|
|
|
39
|
|
||||||
Purchases of common stock
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
17
|
|
|
—
|
|
|
17
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||||
Balance, end of period
|
$
|
6,027
|
|
|
$
|
501
|
|
|
$
|
6,528
|
|
|
$
|
5,807
|
|
|
$
|
453
|
|
|
$
|
6,260
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||
(Millions of dollars)
|
2018
|
|
2017
|
||||||||||||||||||||
Activity
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
Balance, beginning of period
|
$
|
6,018
|
|
|
$
|
493
|
|
|
$
|
6,511
|
|
|
$
|
5,021
|
|
|
$
|
420
|
|
|
$
|
5,441
|
|
Net income (a)
|
942
|
|
|
27
|
|
|
969
|
|
|
795
|
|
|
28
|
|
|
823
|
|
||||||
Other comprehensive income (loss)
|
(498
|
)
|
|
(10
|
)
|
|
(508
|
)
|
|
356
|
|
|
18
|
|
|
374
|
|
||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Additions (reductions)
|
—
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||||
Dividends and other capital changes
|
—
|
|
|
(16
|
)
|
|
(16
|
)
|
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
||||||
Redemption value adjustments
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends to Praxair, Inc. common stock holders ($1.65 per share in 2018 and $1.575 per share in 2017)
|
(474
|
)
|
|
—
|
|
|
(474
|
)
|
|
(450
|
)
|
|
—
|
|
|
(450
|
)
|
||||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
For the dividend reinvestment and stock purchase plan
|
3
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||
For employee savings and incentive plans
|
18
|
|
|
—
|
|
|
18
|
|
|
54
|
|
|
—
|
|
|
54
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchases of common stock
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
21
|
|
|
—
|
|
|
21
|
|
|
28
|
|
|
—
|
|
|
28
|
|
||||||
Balance, end of period
|
$
|
6,027
|
|
|
$
|
501
|
|
|
$
|
6,528
|
|
|
$
|
5,807
|
|
|
$
|
453
|
|
|
$
|
6,260
|
|
(a)
|
Net income for noncontrolling interests excludes Net income related to redeemable noncontrolling interests of
$2 million
for the six months ended June 30, 2018 (
$1 million
for the same time period in 2017) which is not part of total equity (see redeemable noncontrolling interests section below).
|
|
June 30,
|
|
December 31,
|
||||
(Millions of dollars)
|
2018
|
|
2017
|
||||
Cumulative translation adjustment - net of taxes:
|
|
|
|
||||
North America
|
$
|
(940
|
)
|
|
$
|
(885
|
)
|
South America
|
(2,319
|
)
|
|
(2,004
|
)
|
||
Europe
|
(433
|
)
|
|
(398
|
)
|
||
Asia
|
(254
|
)
|
|
(151
|
)
|
||
Surface Technologies
|
(27
|
)
|
|
(17
|
)
|
||
|
(3,973
|
)
|
|
(3,455
|
)
|
||
Derivatives - net of taxes
|
(1
|
)
|
|
(1
|
)
|
||
Pension / OPEB funded status obligation (net of $341 million and $347 million tax benefit in June 30, 2018 and December 31, 2017, respectively)
|
(622
|
)
|
|
(642
|
)
|
||
|
$
|
(4,596
|
)
|
|
$
|
(4,098
|
)
|
(Millions of dollars)
|
2018
|
|
2017
|
||||
Balance, January 1
|
$
|
11
|
|
|
$
|
11
|
|
Net income
|
2
|
|
|
1
|
|
||
Distributions to noncontrolling interest and other
|
(1
|
)
|
|
(2
|
)
|
||
Redemption value adjustments/accretion
|
2
|
|
|
—
|
|
||
Balance, June 30
|
$
|
14
|
|
|
$
|
10
|
|
Six Months Ended June 30,
|
|||||||||||||||||||||
(Dollars in Millions)
|
Industrial Gases
|
|
|
||||||||||||||||||
Sales
|
North America
|
Europe
|
South America
|
Asia
|
Surface Technologies
|
Total
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||
Merchant
|
$
|
1,164
|
|
$
|
300
|
|
$
|
274
|
|
$
|
311
|
|
$
|
—
|
|
$
|
2,049
|
|
34
|
%
|
|
On-Site
|
918
|
|
157
|
|
231
|
|
496
|
|
—
|
|
1,802
|
|
30
|
%
|
|||||||
Packaged Gas
|
1,001
|
|
380
|
|
191
|
|
111
|
|
—
|
|
1,683
|
|
28
|
%
|
|||||||
Other
|
74
|
|
35
|
|
18
|
|
60
|
|
339
|
|
526
|
|
8
|
%
|
|||||||
|
$
|
3,157
|
|
$
|
872
|
|
$
|
714
|
|
$
|
978
|
|
$
|
339
|
|
$
|
6,060
|
|
100
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
(Dollar amounts in millions, except per share data)
|
2018
|
|
2017 (c)
|
|
Variance
|
|
2018
|
|
2017 (c)
|
|
Variance
|
||||||||||
Reported Amounts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
3,061
|
|
|
$
|
2,834
|
|
|
8
|
%
|
|
$
|
6,060
|
|
|
$
|
5,562
|
|
|
9
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
$
|
1,723
|
|
|
$
|
1,599
|
|
|
8
|
%
|
|
$
|
3,400
|
|
|
$
|
3,148
|
|
|
8
|
%
|
Gross margin (a)
|
$
|
1,338
|
|
|
$
|
1,235
|
|
|
8
|
%
|
|
$
|
2,660
|
|
|
$
|
2,414
|
|
|
10
|
%
|
As a percent of sales
|
43.7
|
%
|
|
43.6
|
%
|
|
|
|
43.9
|
%
|
|
43.4
|
%
|
|
|
||||||
Selling, general and administrative
|
$
|
307
|
|
|
$
|
305
|
|
|
1
|
%
|
|
$
|
617
|
|
|
$
|
595
|
|
|
4
|
%
|
As a percent of sales
|
10.0
|
%
|
|
10.8
|
%
|
|
|
|
10.2
|
%
|
|
10.7
|
%
|
|
|
||||||
Depreciation and amortization
|
$
|
311
|
|
|
$
|
292
|
|
|
7
|
%
|
|
$
|
622
|
|
|
$
|
579
|
|
|
7
|
%
|
Transaction costs and other charges (b)
|
$
|
24
|
|
|
$
|
15
|
|
|
|
|
|
$
|
43
|
|
|
$
|
21
|
|
|
|
|
Other income (expense) - net
|
$
|
17
|
|
|
$
|
6
|
|
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
|
||
Operating profit
|
$
|
689
|
|
|
$
|
606
|
|
|
14
|
%
|
|
$
|
1,342
|
|
|
$
|
1,173
|
|
|
14
|
%
|
Operating margin
|
22.5
|
%
|
|
21.4
|
%
|
|
|
|
22.1
|
%
|
|
21.1
|
%
|
|
|
||||||
Interest expense - net
|
$
|
44
|
|
|
$
|
38
|
|
|
16
|
%
|
|
$
|
90
|
|
|
$
|
79
|
|
|
14
|
%
|
Net pension and OPEB cost (benefit), excluding service cost
|
$
|
2
|
|
|
$
|
2
|
|
|
|
|
$
|
4
|
|
|
$
|
(13
|
)
|
|
|
||
Effective tax rate
|
24.6
|
%
|
|
27.7
|
%
|
|
|
|
24.5
|
%
|
|
27.6
|
%
|
|
|
||||||
Income from equity investments
|
$
|
14
|
|
|
$
|
11
|
|
|
27
|
%
|
|
$
|
29
|
|
|
$
|
23
|
|
|
26
|
%
|
Noncontrolling interests
|
$
|
(19
|
)
|
|
$
|
(14
|
)
|
|
36
|
%
|
|
$
|
(29
|
)
|
|
$
|
(29
|
)
|
|
—
|
%
|
Net income - Praxair, Inc.
|
$
|
480
|
|
|
$
|
406
|
|
|
18
|
%
|
|
$
|
942
|
|
|
$
|
795
|
|
|
18
|
%
|
Diluted earnings per share
|
$
|
1.65
|
|
|
$
|
1.41
|
|
|
17
|
%
|
|
$
|
3.24
|
|
|
$
|
2.76
|
|
|
17
|
%
|
Diluted shares outstanding
|
290,908
|
|
|
288,535
|
|
|
1
|
%
|
|
290,926
|
|
|
288,067
|
|
|
1
|
%
|
||||
Number of employees
|
26,658
|
|
|
26,487
|
|
|
|
|
26,658
|
|
|
26,487
|
|
|
|
||||||
Adjusted Amounts (b)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating profit
|
$
|
713
|
|
|
$
|
621
|
|
|
15
|
%
|
|
$
|
1,385
|
|
|
$
|
1,194
|
|
|
16
|
%
|
Operating margin
|
23.3
|
%
|
|
21.9
|
%
|
|
|
|
22.9
|
%
|
|
21.5
|
%
|
|
|
||||||
Effective tax rate
|
24.1
|
%
|
|
27.0
|
%
|
|
|
|
24.1
|
%
|
|
27.1
|
%
|
|
|
||||||
Noncontrolling interests
|
$
|
(19
|
)
|
|
$
|
(14
|
)
|
|
36
|
%
|
|
$
|
(28
|
)
|
|
$
|
(29
|
)
|
|
(3
|
)%
|
Net income - Praxair, Inc.
|
$
|
501
|
|
|
$
|
421
|
|
|
19
|
%
|
|
$
|
981
|
|
|
$
|
816
|
|
|
20
|
%
|
Diluted earnings per share
|
$
|
1.72
|
|
|
$
|
1.46
|
|
|
18
|
%
|
|
$
|
3.37
|
|
|
$
|
2.83
|
|
|
19
|
%
|
Other Financial Data (b)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA
|
$
|
1,014
|
|
|
$
|
909
|
|
|
|
|
$
|
1,993
|
|
|
$
|
1,775
|
|
|
|
||
EBITDA Margin
|
33.1
|
%
|
|
32.1
|
%
|
|
|
|
32.9
|
%
|
|
31.9
|
%
|
|
|
||||||
Adjusted EBITDA
|
$
|
1,038
|
|
|
$
|
924
|
|
|
|
|
$
|
2,036
|
|
|
$
|
1,796
|
|
|
|
||
Adjusted EBITDA Margin
|
33.9
|
%
|
|
32.6
|
%
|
|
|
|
33.6
|
%
|
|
32.3
|
%
|
|
|
(a)
|
Gross margin excludes depreciation and amortization expense.
|
(b)
|
Adjusted amounts and other financial data are non-GAAP performance measures. A reconciliation of reported amounts to adjusted amounts and other financial data can be found in the "Non-GAAP Financial Measures" section of this MD&A. See Note 2 to the condensed consolidated financial statements.
|
(c)
|
Prior period information has been reclassified to conform with current year presentation as a result of the adoption of new accounting guidance on the presentation of net periodic pension and postretirement benefit costs. See Note 1 to the condensed consolidation financial statements.
|
|
Quarter Ended June 30, 2018 vs. 2017
|
|
Six Months Ended June 30, 2018 vs. 2017
|
||||||||
|
% Change
|
|
% Change
|
||||||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume
|
5
|
%
|
|
9
|
%
|
|
5
|
%
|
|
9
|
%
|
Price/Mix
|
2
|
%
|
|
8
|
%
|
|
2
|
%
|
|
8
|
%
|
Cost pass-through
|
1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Currency
|
—
|
%
|
|
—
|
%
|
|
2
|
%
|
|
2
|
%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(3
|
)%
|
|
—
|
%
|
|
(5
|
)%
|
Reported
|
8
|
%
|
|
14
|
%
|
|
9
|
%
|
|
14
|
%
|
Add: Transaction costs and other charges
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
|
2
|
%
|
Adjusted
|
8
|
%
|
|
15
|
%
|
|
9
|
%
|
|
16
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
22
|
%
|
|
22
|
%
|
|
7
|
%
|
|
22
|
%
|
|
22
|
%
|
|
7
|
%
|
Metals
|
17
|
%
|
|
17
|
%
|
|
11
|
%
|
|
17
|
%
|
|
17
|
%
|
|
10
|
%
|
Energy
|
11
|
%
|
|
12
|
%
|
|
2
|
%
|
|
11
|
%
|
|
12
|
%
|
|
2
|
%
|
Chemicals
|
11
|
%
|
|
10
|
%
|
|
13
|
%
|
|
11
|
%
|
|
10
|
%
|
|
13
|
%
|
Electronics
|
9
|
%
|
|
9
|
%
|
|
7
|
%
|
|
9
|
%
|
|
9
|
%
|
|
8
|
%
|
Healthcare
|
8
|
%
|
|
8
|
%
|
|
7
|
%
|
|
8
|
%
|
|
8
|
%
|
|
6
|
%
|
Food & Beverage
|
9
|
%
|
|
10
|
%
|
|
4
|
%
|
|
9
|
%
|
|
9
|
%
|
|
5
|
%
|
Aerospace
|
4
|
%
|
|
3
|
%
|
|
16
|
%
|
|
4
|
%
|
|
3
|
%
|
|
12
|
%
|
Other
|
9
|
%
|
|
9
|
%
|
|
5
|
%
|
|
9
|
%
|
|
10
|
%
|
|
2
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
% of Sales
|
|
% of Sales
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Sales by Distribution Method
|
|
|
|
|
|
|
|
||||
On-Site
|
29
|
%
|
|
30
|
%
|
|
30
|
%
|
|
30
|
%
|
Merchant
|
34
|
%
|
|
34
|
%
|
|
34
|
%
|
|
34
|
%
|
Packaged Gas
|
28
|
%
|
|
28
|
%
|
|
28
|
%
|
|
28
|
%
|
Other
|
9
|
%
|
|
8
|
%
|
|
8
|
%
|
|
8
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
(Dollar amounts in millions)
|
2018
|
|
2017*
|
|
Variance
|
|
2018
|
|
2017*
|
|
Variance
|
||||||||||
SALES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
1,594
|
|
|
$
|
1,505
|
|
|
6
|
%
|
|
$
|
3,157
|
|
|
$
|
2,963
|
|
|
7
|
%
|
Europe
|
444
|
|
|
383
|
|
|
16
|
%
|
|
872
|
|
|
739
|
|
|
18
|
%
|
||||
South America
|
349
|
|
|
373
|
|
|
(6
|
)%
|
|
714
|
|
|
742
|
|
|
(4
|
)%
|
||||
Asia
|
502
|
|
|
422
|
|
|
19
|
%
|
|
978
|
|
|
817
|
|
|
20
|
%
|
||||
Surface Technologies
|
172
|
|
|
151
|
|
|
14
|
%
|
|
339
|
|
|
301
|
|
|
13
|
%
|
||||
|
$
|
3,061
|
|
|
$
|
2,834
|
|
|
8
|
%
|
|
$
|
6,060
|
|
|
$
|
5,562
|
|
|
9
|
%
|
OPERATING PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
432
|
|
|
$
|
378
|
|
|
14
|
%
|
|
$
|
838
|
|
|
$
|
735
|
|
|
14
|
%
|
Europe
|
87
|
|
|
74
|
|
|
18
|
%
|
|
167
|
|
|
141
|
|
|
18
|
%
|
||||
South America
|
56
|
|
|
64
|
|
|
(13
|
)%
|
|
110
|
|
|
112
|
|
|
(2
|
)%
|
||||
Asia
|
107
|
|
|
80
|
|
|
34
|
%
|
|
211
|
|
|
155
|
|
|
36
|
%
|
||||
Surface Technologies
|
31
|
|
|
25
|
|
|
24
|
%
|
|
59
|
|
|
51
|
|
|
16
|
%
|
||||
Segment operating profit
|
713
|
|
|
621
|
|
|
15
|
%
|
|
1,385
|
|
|
1,194
|
|
|
16
|
%
|
||||
Transaction costs and other charges
|
(24
|
)
|
|
(15
|
)
|
|
|
|
(43
|
)
|
|
(21
|
)
|
|
|
||||||
Total operating profit
|
$
|
689
|
|
|
$
|
606
|
|
|
14
|
%
|
|
$
|
1,342
|
|
|
$
|
1,173
|
|
|
14
|
%
|
|
Quarter Ended June 30,
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
|
2018
|
|
2017
|
|
Variance
|
||||||||||
Sales
|
$
|
1,594
|
|
|
$
|
1,505
|
|
|
6
|
%
|
|
|
$
|
3,157
|
|
|
$
|
2,963
|
|
|
7
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
830
|
|
|
793
|
|
|
|
|
|
1,636
|
|
|
1,567
|
|
|
|
||||||
Gross margin
|
764
|
|
|
712
|
|
|
|
|
|
1,521
|
|
|
1,396
|
|
|
|
||||||
Operating expenses
|
165
|
|
|
177
|
|
|
|
|
|
354
|
|
|
350
|
|
|
|
||||||
Depreciation and amortization
|
167
|
|
|
157
|
|
|
|
|
|
329
|
|
|
311
|
|
|
|
||||||
Operating profit
|
$
|
432
|
|
|
$
|
378
|
|
|
14
|
%
|
|
|
$
|
838
|
|
|
$
|
735
|
|
|
14
|
%
|
Margin %
|
27.1
|
%
|
|
25.1
|
%
|
|
|
|
|
26.5
|
%
|
|
24.8
|
%
|
|
|
|
Quarter Ended June 30, 2018 vs. 2017
|
|
Six Months Ended June 30, 2018 vs. 2017
|
||||||||
|
% Change
|
|
% Change
|
||||||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume
|
4
|
%
|
|
8
|
%
|
|
4
|
%
|
|
9
|
%
|
Price/Mix
|
2
|
%
|
|
7
|
%
|
|
2
|
%
|
|
7
|
%
|
Cost pass-through
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Currency
|
—
|
%
|
|
—
|
%
|
|
1
|
%
|
|
1
|
%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(1
|
)%
|
|
—
|
%
|
|
(3
|
)%
|
|
6
|
%
|
|
14
|
%
|
|
7
|
%
|
|
14
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
29
|
%
|
|
28
|
%
|
|
7
|
%
|
|
29
|
%
|
|
29
|
%
|
|
6
|
%
|
Metals
|
11
|
%
|
|
11
|
%
|
|
5
|
%
|
|
12
|
%
|
|
12
|
%
|
|
6
|
%
|
Energy
|
17
|
%
|
|
18
|
%
|
|
(2
|
)%
|
|
17
|
%
|
|
18
|
%
|
|
(2
|
)%
|
Chemicals
|
10
|
%
|
|
9
|
%
|
|
20
|
%
|
|
10
|
%
|
|
9
|
%
|
|
21
|
%
|
Electronics
|
5
|
%
|
|
5
|
%
|
|
4
|
%
|
|
5
|
%
|
|
5
|
%
|
|
9
|
%
|
Healthcare
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
8
|
%
|
Food & Beverage
|
10
|
%
|
|
10
|
%
|
|
8
|
%
|
|
10
|
%
|
|
10
|
%
|
|
8
|
%
|
Aerospace
|
2
|
%
|
|
2
|
%
|
|
31
|
%
|
|
2
|
%
|
|
2
|
%
|
|
20
|
%
|
Other
|
9
|
%
|
|
10
|
%
|
|
—
|
%
|
|
8
|
%
|
|
8
|
%
|
|
(2
|
)%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
% of Sales
|
|
% of Sales
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Sales by Distribution Method
|
|
|
|
|
|
|
|
||||
On- Site
|
29
|
%
|
|
30
|
%
|
|
29
|
%
|
|
30
|
%
|
Merchant
|
37
|
%
|
|
37
|
%
|
|
37
|
%
|
|
37
|
%
|
Packaged Gas
|
32
|
%
|
|
31
|
%
|
|
32
|
%
|
|
31
|
%
|
Other
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended June 30,
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
Variance %
|
|
|
2018
|
|
2017
|
|
Variance %
|
||||||||||
Sales
|
$
|
444
|
|
|
$
|
383
|
|
|
16
|
%
|
|
|
$
|
872
|
|
|
$
|
739
|
|
|
18
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
261
|
|
|
219
|
|
|
|
|
|
509
|
|
|
420
|
|
|
|
||||||
Gross margin
|
183
|
|
|
164
|
|
|
|
|
|
363
|
|
|
319
|
|
|
|
||||||
Operating expenses
|
52
|
|
|
49
|
|
|
|
|
|
106
|
|
|
97
|
|
|
|
||||||
Depreciation and amortization
|
44
|
|
|
41
|
|
|
|
|
|
90
|
|
|
81
|
|
|
|
||||||
Operating profit
|
$
|
87
|
|
|
$
|
74
|
|
|
18
|
%
|
|
|
$
|
167
|
|
|
$
|
141
|
|
|
18
|
%
|
Margin %
|
19.6
|
%
|
|
19.3
|
%
|
|
|
|
|
19.2
|
%
|
|
19.1
|
%
|
|
|
|
Quarter Ended June 30, 2018 vs. 2017
|
|
Six Months Ended June 30, 2018 vs. 2017
|
||||||||
|
% Change
|
|
% Change
|
|
% Change
|
|
% Change
|
||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
3
|
%
|
Price/Mix
|
3
|
%
|
|
13
|
%
|
|
2
|
%
|
|
10
|
%
|
Cost pass-through
|
4
|
%
|
|
—
|
%
|
|
3
|
%
|
|
—
|
%
|
Currency
|
7
|
%
|
|
8
|
%
|
|
11
|
%
|
|
12
|
%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(5
|
)%
|
|
—
|
%
|
|
(7
|
)%
|
|
16
|
%
|
|
18
|
%
|
|
18
|
%
|
|
18
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
21
|
%
|
|
20
|
%
|
|
14
|
%
|
|
21
|
%
|
|
21
|
%
|
|
10
|
%
|
Metals
|
16
|
%
|
|
16
|
%
|
|
14
|
%
|
|
17
|
%
|
|
16
|
%
|
|
12
|
%
|
Energy
|
4
|
%
|
|
5
|
%
|
|
—
|
%
|
|
4
|
%
|
|
4
|
%
|
|
(3
|
)%
|
Chemicals
|
12
|
%
|
|
12
|
%
|
|
10
|
%
|
|
12
|
%
|
|
12
|
%
|
|
7
|
%
|
Electronics
|
7
|
%
|
|
8
|
%
|
|
(7
|
)%
|
|
7
|
%
|
|
8
|
%
|
|
—
|
%
|
Healthcare
|
12
|
%
|
|
12
|
%
|
|
12
|
%
|
|
12
|
%
|
|
12
|
%
|
|
10
|
%
|
Food & Beverage
|
14
|
%
|
|
15
|
%
|
|
1
|
%
|
|
14
|
%
|
|
14
|
%
|
|
4
|
%
|
Aerospace
|
1
|
%
|
|
1
|
%
|
|
8
|
%
|
|
1
|
%
|
|
1
|
%
|
|
(8
|
)%
|
Other
|
13
|
%
|
|
11
|
%
|
|
7
|
%
|
|
12
|
%
|
|
12
|
%
|
|
3
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
% of Sales
|
|
% of Sales
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Sales by Distribution Method
|
|
|
|
|
|
|
|
||||
On- Site
|
17
|
%
|
|
18
|
%
|
|
18
|
%
|
|
19
|
%
|
Merchant
|
34
|
%
|
|
35
|
%
|
|
34
|
%
|
|
35
|
%
|
Packaged Gas
|
45
|
%
|
|
43
|
%
|
|
44
|
%
|
|
42
|
%
|
Other
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
2018
|
|
2017
|
|
Variance
|
||||||||||
Sales
|
$
|
349
|
|
|
$
|
373
|
|
|
(6
|
)%
|
|
$
|
714
|
|
|
$
|
742
|
|
|
(4
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
209
|
|
|
221
|
|
|
|
|
428
|
|
|
444
|
|
|
|
||||||
Gross margin
|
140
|
|
|
152
|
|
|
|
|
286
|
|
|
298
|
|
|
|
||||||
Operating expenses
|
47
|
|
|
49
|
|
|
|
|
98
|
|
|
109
|
|
|
|
||||||
Depreciation and amortization
|
37
|
|
|
39
|
|
|
|
|
78
|
|
|
77
|
|
|
|
||||||
Operating profit
|
$
|
56
|
|
|
$
|
64
|
|
|
(13
|
)%
|
|
$
|
110
|
|
|
$
|
112
|
|
|
(2
|
)%
|
Margin %
|
16.0
|
%
|
|
17.2
|
%
|
|
|
|
15.4
|
%
|
|
15.1
|
%
|
|
|
|
Quarter Ended June 30, 2018 vs. 2017
|
|
Six Months Ended June 30, 2018 vs. 2017
|
||||||||
|
% Change
|
|
% Change
|
|
% Change
|
|
% Change
|
||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume
|
4
|
%
|
|
6
|
%
|
|
2
|
%
|
|
3
|
%
|
Price/Mix
|
—
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
4
|
%
|
Cost pass-through
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Currency
|
(10
|
)%
|
|
(14
|
)%
|
|
(7
|
)%
|
|
(11
|
)%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(4
|
)%
|
|
—
|
%
|
|
2
|
%
|
|
(6
|
)%
|
|
(13
|
)%
|
|
(4
|
)%
|
|
(2
|
)%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
16
|
%
|
|
16
|
%
|
|
(8
|
)%
|
|
16
|
%
|
|
17
|
%
|
|
(4
|
)%
|
Metals
|
32
|
%
|
|
31
|
%
|
|
12
|
%
|
|
31
|
%
|
|
30
|
%
|
|
8
|
%
|
Energy
|
2
|
%
|
|
2
|
%
|
|
3
|
%
|
|
2
|
%
|
|
2
|
%
|
|
(1
|
)%
|
Chemicals
|
9
|
%
|
|
10
|
%
|
|
—
|
%
|
|
10
|
%
|
|
10
|
%
|
|
—
|
%
|
Electronics
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Healthcare
|
20
|
%
|
|
20
|
%
|
|
3
|
%
|
|
19
|
%
|
|
20
|
%
|
|
3
|
%
|
Food & Beverage
|
12
|
%
|
|
12
|
%
|
|
(1
|
)%
|
|
13
|
%
|
|
13
|
%
|
|
—
|
%
|
Aerospace
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
9
|
%
|
|
9
|
%
|
|
12
|
%
|
|
9
|
%
|
|
8
|
%
|
|
12
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
% of Sales
|
|
% of Sales
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Sales by Distribution Method
|
|
|
|
|
|
|
|
||||
On- Site
|
34
|
%
|
|
33
|
%
|
|
32
|
%
|
|
32
|
%
|
Merchant
|
37
|
%
|
|
38
|
%
|
|
38
|
%
|
|
38
|
%
|
Packaged Gas
|
27
|
%
|
|
27
|
%
|
|
27
|
%
|
|
27
|
%
|
Other
|
2
|
%
|
|
2
|
%
|
|
3
|
%
|
|
3
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
2018
|
|
2017
|
|
Variance
|
||||||||||
Sales
|
$
|
502
|
|
|
$
|
422
|
|
|
19
|
%
|
|
$
|
978
|
|
|
$
|
817
|
|
|
20
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
312
|
|
|
268
|
|
|
|
|
606
|
|
|
517
|
|
|
|
||||||
Gross margin
|
190
|
|
|
154
|
|
|
|
|
372
|
|
|
300
|
|
|
|
||||||
Operating expenses
|
31
|
|
|
28
|
|
|
|
|
57
|
|
|
55
|
|
|
|
||||||
Depreciation and amortization
|
52
|
|
|
46
|
|
|
|
|
104
|
|
|
90
|
|
|
|
||||||
Operating profit
|
$
|
107
|
|
|
$
|
80
|
|
|
34
|
%
|
|
$
|
211
|
|
|
$
|
155
|
|
|
36
|
%
|
Margin %
|
21.3
|
%
|
|
19.0
|
%
|
|
|
|
21.6
|
%
|
|
19.0
|
%
|
|
|
|
Quarter Ended June 30, 2018 vs. 2017
|
|
Six Months Ended June 30, 2018 vs. 2017
|
||||||||
|
% Change
|
|
% Change
|
|
% Change
|
|
% Change
|
||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume
|
11
|
%
|
|
16
|
%
|
|
11
|
%
|
|
16
|
%
|
Price/Mix
|
3
|
%
|
|
17
|
%
|
|
3
|
%
|
|
16
|
%
|
Cost pass-through
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
Currency
|
4
|
%
|
|
5
|
%
|
|
5
|
%
|
|
6
|
%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(4
|
)%
|
|
—
|
%
|
|
(2
|
)%
|
|
19
|
%
|
|
34
|
%
|
|
20
|
%
|
|
36
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
9
|
%
|
|
9
|
%
|
|
14
|
%
|
|
9
|
%
|
|
9
|
%
|
|
20
|
%
|
Metals
|
27
|
%
|
|
27
|
%
|
|
20
|
%
|
|
27
|
%
|
|
26
|
%
|
|
19
|
%
|
Energy
|
4
|
%
|
|
3
|
%
|
|
86
|
%
|
|
5
|
%
|
|
3
|
%
|
|
97
|
%
|
Chemicals
|
15
|
%
|
|
15
|
%
|
|
9
|
%
|
|
15
|
%
|
|
15
|
%
|
|
9
|
%
|
Electronics
|
33
|
%
|
|
33
|
%
|
|
12
|
%
|
|
33
|
%
|
|
34
|
%
|
|
9
|
%
|
Healthcare
|
1
|
%
|
|
1
|
%
|
|
8
|
%
|
|
1
|
%
|
|
1
|
%
|
|
2
|
%
|
Food & Beverage
|
2
|
%
|
|
2
|
%
|
|
(8
|
)%
|
|
2
|
%
|
|
2
|
%
|
|
(9
|
)%
|
Aerospace
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
9
|
%
|
|
10
|
%
|
|
7
|
%
|
|
8
|
%
|
|
10
|
%
|
|
6
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
% of Sales
|
|
% of Sales
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Sales by Distribution Method
|
|
|
|
|
|
|
|
||||
On- Site
|
50
|
%
|
|
50
|
%
|
|
51
|
%
|
|
50
|
%
|
Merchant
|
33
|
%
|
|
30
|
%
|
|
32
|
%
|
|
29
|
%
|
Packaged Gas
|
11
|
%
|
|
14
|
%
|
|
11
|
%
|
|
14
|
%
|
Other
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
|
7
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended June 30,
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
|
2018
|
|
2017
|
|
Variance
|
||||||||||
Sales
|
$
|
172
|
|
|
$
|
151
|
|
|
14
|
%
|
|
|
$
|
339
|
|
|
$
|
301
|
|
|
13
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
111
|
|
|
98
|
|
|
|
|
|
221
|
|
|
195
|
|
|
|
||||||
Gross margin
|
61
|
|
|
53
|
|
|
|
|
|
118
|
|
|
106
|
|
|
|
||||||
Operating expenses
|
19
|
|
|
18
|
|
|
|
|
|
38
|
|
|
35
|
|
|
|
||||||
Depreciation and amortization
|
11
|
|
|
10
|
|
|
|
|
|
21
|
|
|
20
|
|
|
|
||||||
Operating profit
|
$
|
31
|
|
|
$
|
25
|
|
|
24
|
%
|
|
|
$
|
59
|
|
|
$
|
51
|
|
|
16
|
%
|
Margin %
|
18.0
|
%
|
|
16.6
|
%
|
|
|
|
|
17.4
|
%
|
|
16.9
|
%
|
|
|
|
Quarter Ended June 30, 2018 vs. 2017
|
|
Six Months Ended June 30, 2018 vs. 2017
|
||||||||
|
% Change
|
|
% Change
|
|
% Change
|
|
% Change
|
||||
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
||||
Volume/Price
|
10
|
%
|
|
25
|
%
|
|
8
|
%
|
|
18
|
%
|
Cost pass-through
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
Currency
|
3
|
%
|
|
2
|
%
|
|
4
|
%
|
|
3
|
%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(3
|
)%
|
|
—
|
%
|
|
(5
|
)%
|
|
14
|
%
|
|
24
|
%
|
|
13
|
%
|
|
16
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
% of Sales
|
|
% Change*
|
|
% of Sales
|
|
% Change*
|
||||||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||||||
Sales by End Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
12
|
%
|
|
10
|
%
|
|
30
|
%
|
|
12
|
%
|
|
11
|
%
|
|
20
|
%
|
Metals
|
8
|
%
|
|
9
|
%
|
|
(7
|
)%
|
|
8
|
%
|
|
9
|
%
|
|
(3
|
)%
|
Energy
|
19
|
%
|
|
19
|
%
|
|
7
|
%
|
|
19
|
%
|
|
19
|
%
|
|
6
|
%
|
Chemicals
|
2
|
%
|
|
2
|
%
|
|
3
|
%
|
|
2
|
%
|
|
2
|
%
|
|
8
|
%
|
Electronics
|
1
|
%
|
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
1
|
%
|
|
44
|
%
|
Healthcare
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Food & Beverage
|
3
|
%
|
|
3
|
%
|
|
19
|
%
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
Aerospace
|
43
|
%
|
|
44
|
%
|
|
10
|
%
|
|
44
|
%
|
|
44
|
%
|
|
9
|
%
|
Other
|
12
|
%
|
|
12
|
%
|
|
11
|
%
|
|
11
|
%
|
|
11
|
%
|
|
5
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Percentage of YTD 2018 Consolidated Sales
|
|
Exchange Rate for
Income Statement
|
|
Exchange Rate for
Balance Sheet
|
|||||||||
|
Year-To-Date Average
|
|
June 30,
|
|
December 31,
|
|||||||||
Currency
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||
Euro
|
14
|
%
|
|
0.83
|
|
|
0.92
|
|
|
0.86
|
|
|
0.83
|
|
Brazilian real
|
9
|
%
|
|
3.41
|
|
|
3.18
|
|
|
3.86
|
|
|
3.31
|
|
Canadian dollar
|
7
|
%
|
|
1.28
|
|
|
1.33
|
|
|
1.31
|
|
|
1.26
|
|
Chinese yuan
|
7
|
%
|
|
6.37
|
|
|
6.88
|
|
|
6.62
|
|
|
6.51
|
|
Mexican peso
|
5
|
%
|
|
19.03
|
|
|
19.37
|
|
|
19.91
|
|
|
19.66
|
|
Korean won
|
4
|
%
|
|
1,076
|
|
|
1,142
|
|
|
1,115
|
|
|
1,067
|
|
India rupee
|
3
|
%
|
|
65.65
|
|
|
65.70
|
|
|
68.47
|
|
|
63.87
|
|
Argentine peso
|
1
|
%
|
|
21.30
|
|
|
15.69
|
|
|
28.85
|
|
|
18.65
|
|
British pound
|
1
|
%
|
|
0.73
|
|
|
0.79
|
|
|
0.76
|
|
|
0.74
|
|
Norwegian krone
|
1
|
%
|
|
7.93
|
|
|
8.48
|
|
|
8.15
|
|
|
8.20
|
|
(Millions of dollars)
|
Six months ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
NET CASH PROVIDED BY (USED FOR):
|
|
|
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income (including noncontrolling interests)
|
$
|
971
|
|
|
$
|
824
|
|
Non-cash charges (credits):
|
|
|
|
||||
Add: Depreciation and amortization
|
622
|
|
|
579
|
|
||
Add: Deferred income taxes
|
10
|
|
|
48
|
|
||
Add: Share-based compensation
|
21
|
|
|
28
|
|
||
Add: Transaction costs and other charges, net of payments (a)
|
15
|
|
|
17
|
|
||
Net income adjusted for non-cash charges
|
1,639
|
|
|
1,496
|
|
||
Less: Working capital
|
(138
|
)
|
|
(164
|
)
|
||
Less: Pension contributions
|
(10
|
)
|
|
(6
|
)
|
||
Other
|
(13
|
)
|
|
85
|
|
||
Net cash provided by operating activities
|
$
|
1,478
|
|
|
$
|
1,411
|
|
INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(676
|
)
|
|
(652
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(2
|
)
|
||
Divestitures and asset sales
|
69
|
|
|
17
|
|
||
Net cash used for investing activities
|
$
|
(607
|
)
|
|
$
|
(637
|
)
|
FINANCING ACTIVITIES
|
|
|
|
||||
Debt increase (decrease) - net
|
(492
|
)
|
|
(305
|
)
|
||
Issuances (purchases) of common stock - net
|
43
|
|
|
59
|
|
||
Cash dividends - Praxair, Inc. shareholders
|
(474
|
)
|
|
(450
|
)
|
||
Noncontrolling interest transactions and other
|
(22
|
)
|
|
(84
|
)
|
||
Net cash provided by (used for) financing activities
|
$
|
(945
|
)
|
|
$
|
(780
|
)
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
$
|
(64
|
)
|
|
$
|
17
|
|
Cash and cash equivalents, end-of-period
|
$
|
479
|
|
|
$
|
535
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollar amounts in millions, except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Adjusted Operating Profit
|
|
|
|
|
|
|
|
||||||||
Reported operating profit
|
$
|
689
|
|
|
$
|
606
|
|
|
$
|
1,342
|
|
|
$
|
1,173
|
|
Add: Transaction costs and other charges
|
24
|
|
|
15
|
|
|
43
|
|
|
21
|
|
||||
Adjusted operating profit
|
$
|
713
|
|
|
$
|
621
|
|
|
$
|
1,385
|
|
|
$
|
1,194
|
|
Reported percent change
|
14
|
%
|
|
|
|
14
|
%
|
|
|
||||||
Adjusted percent change
|
15
|
%
|
|
|
|
16
|
%
|
|
|
||||||
Adjusted Income Taxes and Effective Tax Rate
|
|
|
|
|
|
|
|
||||||||
Reported income taxes
|
$
|
158
|
|
|
$
|
157
|
|
|
$
|
306
|
|
|
$
|
306
|
|
Add: Transaction costs and other charges
|
3
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Adjusted income taxes
|
$
|
161
|
|
|
$
|
157
|
|
|
$
|
311
|
|
|
$
|
306
|
|
Adjusted Effective Tax Rate
|
|
|
|
|
|
|
|
||||||||
Reported income before income taxes and equity investments
|
$
|
643
|
|
|
$
|
566
|
|
|
$
|
1,248
|
|
|
$
|
1,107
|
|
Add: Transaction costs and other charges
|
24
|
|
|
15
|
|
|
43
|
|
|
21
|
|
||||
Adjusted income before income taxes and equity investments
|
$
|
667
|
|
|
$
|
581
|
|
|
$
|
1,291
|
|
|
$
|
1,128
|
|
Reported effective tax rate
|
24.6
|
%
|
|
27.7
|
%
|
|
24.5
|
%
|
|
27.6
|
%
|
||||
Adjusted effective tax rate
|
24.1
|
%
|
|
27.0
|
%
|
|
24.1
|
%
|
|
27.1
|
%
|
||||
Adjusted Noncontrolling Interests
|
|
|
|
|
|
|
|
||||||||
Reported noncontrolling interests
|
$
|
19
|
|
|
$
|
14
|
|
|
$
|
29
|
|
|
$
|
29
|
|
Add: Cost reduction program
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Adjusted Noncontrolling Interests
|
$
|
19
|
|
|
$
|
14
|
|
|
$
|
28
|
|
|
$
|
29
|
|
Adjusted Net Income - Praxair, Inc.
|
|
|
|
|
|
|
|
||||||||
Reported net income - Praxair, Inc.
|
$
|
480
|
|
|
$
|
406
|
|
|
$
|
942
|
|
|
$
|
795
|
|
Add: Transaction costs and other charges
|
21
|
|
|
15
|
|
|
38
|
|
|
21
|
|
||||
Add: Cost reduction program
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total adjustments
|
21
|
|
|
15
|
|
|
39
|
|
|
21
|
|
||||
Adjusted net income - Praxair, Inc.
|
$
|
501
|
|
|
$
|
421
|
|
|
$
|
981
|
|
|
$
|
816
|
|
Reported percent change
|
18
|
%
|
|
|
|
18
|
%
|
|
|
||||||
Adjusted percent change
|
19
|
%
|
|
|
|
20
|
%
|
|
|
Adjusted Diluted Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Reported diluted EPS
|
$
|
1.65
|
|
|
$
|
1.41
|
|
|
$
|
3.24
|
|
|
$
|
2.76
|
|
Add: Transaction costs and other charges
|
0.07
|
|
|
0.05
|
|
|
0.13
|
|
|
0.07
|
|
||||
Adjusted diluted EPS
|
$
|
1.72
|
|
|
$
|
1.46
|
|
|
$
|
3.37
|
|
|
$
|
2.83
|
|
Reported percent change
|
17
|
%
|
|
|
|
|
17
|
%
|
|
|
|||||
Adjusted percent change
|
18
|
%
|
|
|
|
|
19
|
%
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
(Dollar amounts in millions)
|
|
|
|
|
|
|
|
||||||||
Reported net income - Praxair, Inc.
|
$
|
480
|
|
|
$
|
406
|
|
|
$
|
942
|
|
|
$
|
795
|
|
Add: noncontrolling interest
|
19
|
|
|
14
|
|
|
29
|
|
|
29
|
|
||||
Add: interest expense - net
|
44
|
|
|
38
|
|
|
90
|
|
|
79
|
|
||||
Add: net pension and OPEB cost (benefit), excluding service cost
|
2
|
|
|
2
|
|
|
4
|
|
|
(13
|
)
|
||||
Add: income taxes
|
158
|
|
|
157
|
|
|
306
|
|
|
306
|
|
||||
Add: depreciation and amortization
|
311
|
|
|
292
|
|
|
622
|
|
|
579
|
|
||||
EBITDA
|
$
|
1,014
|
|
|
$
|
909
|
|
|
$
|
1,993
|
|
|
$
|
1,775
|
|
|
|
|
|
|
|
|
|
||||||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Add: Transaction costs
|
$
|
24
|
|
|
$
|
15
|
|
|
$
|
43
|
|
|
$
|
21
|
|
ADJUSTED EBITDA
|
$
|
1,038
|
|
|
$
|
924
|
|
|
$
|
2,036
|
|
|
$
|
1,796
|
|
|
|
|
|
|
|
|
|
||||||||
Reported Sales
|
$
|
3,061
|
|
|
$
|
2,834
|
|
|
$
|
6,060
|
|
|
$
|
5,562
|
|
EBITDA Margin
|
33.1
|
%
|
|
32.1
|
%
|
|
32.9
|
%
|
|
31.9
|
%
|
||||
Adjusted EBITDA Margin
|
33.9
|
%
|
|
32.6
|
%
|
|
33.6
|
%
|
|
32.3
|
%
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
(Dollar amounts in millions)
|
|
|
|
||||
Debt
|
$
|
8,458
|
|
|
$
|
9,367
|
|
Less: cash and cash equivalents
|
(479
|
)
|
|
(535
|
)
|
||
Net debt
|
7,979
|
|
|
8,832
|
|
||
Equity and redeemable noncontrolling interests
|
|
|
|
||||
Redeemable noncontrolling interests
|
14
|
|
|
10
|
|
||
Praxair, Inc. shareholders’ equity
|
6,027
|
|
|
5,807
|
|
||
Noncontrolling interests
|
501
|
|
|
453
|
|
||
Total equity and redeemable noncontrolling interests
|
6,542
|
|
|
6,270
|
|
||
Capital
|
$
|
14,521
|
|
|
$
|
15,102
|
|
DEBT-TO-CAPITAL RATIO
|
54.9
|
%
|
|
58.5
|
%
|
(a)
|
Based on an evaluation of the effectiveness of Praxair’s disclosure controls and procedures, which was made under the supervision and with the participation of management, including Praxair’s principal executive officer and principal financial officer, the principal executive officer and principal financial officer have each concluded that, as of the end of the quarterly period covered by this report, such disclosure controls and procedures are effective in ensuring that information required to be disclosed by Praxair in reports that it files under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and accumulated and communicated to management including Praxair’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
|
(b)
|
There were no changes in Praxair’s internal control over financial reporting that occurred during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, Praxair’s internal control over financial reporting.
|
|
Period
|
Total Number
of Shares
Purchased
(Thousands)
|
|
Average
Price Paid
Per Share
|
|
Total Numbers of Shares
Purchased as Part of
Publicly Announced
Program (1)
(Thousands)
|
|
Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Program (2)
(Millions)
|
||||||
April 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,579
|
|
May 2018
|
2
|
|
|
$
|
151.89
|
|
|
2
|
|
|
$
|
1,579
|
|
June 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,579
|
|
Second Quarter 2018
|
2
|
|
|
$
|
151.89
|
|
|
2
|
|
|
$
|
1,579
|
|
(1)
|
On January 28, 2014, the Company's board of directors approved the repurchase of $1.5 billion of its common stock ("2014 program") which could take place from time to time on the open market (which could include the use of 10b5-1 trading plans) or through negotiated transactions, subject to market and business conditions.
|
(2)
|
As of June 30, 2018, the Company purchased $1,421 million of its common stock pursuant to the 2014 program, leaving an additional $79 million remaining authorized under the 2014 program. The 2014 program does not have any stated expiration date. In addition, on July 28, 2015, the Company’s board of directors approved the repurchase of $1.5 billion of its common stock (“2015 program”) which could take place from time to time on the open market (which could include the use of 10b5-1 trade plans) or through negotiated transactions, subject to market and business conditions. The 2015 program does not have any stated expiration date. The 2015 program is in addition to the 2014 program.
|
(a)
|
Exhibits
|
|
|
|
|
|
|
|
10.1
|
|
|
|
|
|
|
|
12.01
|
|
|
|
|
|
|
|
31.01
|
|
|
|
|
|
|
|
31.02
|
|
|
|
|
|
|
|
32.01
|
|
|
|
|
|
|
|
32.02
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
PRAXAIR, INC.
|
|
|
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date: July 26, 2018
|
|
By: /s/ Kelcey E. Hoyt
|
|
|
|
|
|
|
|
Kelcey E. Hoyt
|
|
|
|
Vice President and Controller
|
|
|
|
(On behalf of the Registrant
|
|
|
|
and as Chief Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
RATIO OF EARNINGS TO FIXED CHARGES
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Praxair, Inc. and Subsidiaries
|
|
|||||||||||||||
|
|
|
|
|
|
|
Exhibit 12.01
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Six Months Ended June 30,
|
|
Year Ended December 31,
|
||||||||||||||||
(Dollar amounts in millions, except ratios)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax income from continuing operations before adjustment for
|
|
|
|
|
|
|
|
|
|
||||||||||
noncontrolling interests in consolidated subsidiaries or income or
|
|
|
|
|
|
|
|
|
|
||||||||||
loss from equity investees
|
$
|
1,248
|
|
|
$
|
2,287
|
|
|
$
|
2,048
|
|
|
$
|
2,160
|
|
|
$
|
2,395
|
|
Capitalized interest
|
(8
|
)
|
|
(28
|
)
|
|
(34
|
)
|
|
(33
|
)
|
|
(38
|
)
|
|||||
Depreciation of capitalized interest
|
13
|
|
|
17
|
|
|
19
|
|
|
22
|
|
|
27
|
|
|||||
Dividends from less than 50%-owned companies carried at equity
|
29
|
|
|
111
|
|
|
8
|
|
|
11
|
|
|
6
|
|
|||||
Adjusted pre-tax income from continuing operations before adjustment
|
|
|
|
|
|
|
|
|
|
||||||||||
for noncontrolling interests in consolidated subsidiaries or income
|
|
|
|
|
|
|
|
|
|
||||||||||
or loss from equity investees
|
$
|
1,282
|
|
|
$
|
2,387
|
|
|
$
|
2,041
|
|
|
$
|
2,160
|
|
|
$
|
2,390
|
|
Fixed charges
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest on long-term and short-term debt
|
$
|
90
|
|
|
$
|
161
|
|
|
$
|
190
|
|
|
$
|
161
|
|
|
$
|
213
|
|
Capitalized interest
|
8
|
|
|
28
|
|
|
34
|
|
|
33
|
|
|
38
|
|
|||||
Rental expenses representative of an interest factor
|
30
|
|
|
49
|
|
|
47
|
|
|
47
|
|
|
52
|
|
|||||
Total fixed charges
|
$
|
128
|
|
|
$
|
238
|
|
|
$
|
271
|
|
|
$
|
241
|
|
|
$
|
303
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted pre-tax income from continuing operations before adjustment
|
|
|
|
|
|
|
|
|
|
||||||||||
for noncontrolling interests in consolidated subsidiaries or income or
|
|
|
|
|
|
|
|
|
|
||||||||||
loss from equity investees plus total fixed charges
|
$
|
1,410
|
|
|
$
|
2,625
|
|
|
$
|
2,312
|
|
|
$
|
2,401
|
|
|
$
|
2,693
|
|
RATIO OF EARNINGS TO FIXED CHARGES
|
11.0
|
|
|
11.0
|
|
|
8.5
|
|
|
10.0
|
|
|
8.9
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Praxair, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
July 26, 2018
|
|
By: /s/ Stephen F. Angel
|
|
|
|
|
|
|
|
Stephen F. Angel
|
|
|
|
Chairman, President
|
|
|
|
Chief Executive Officer
|
|
|
|
(principal executive officer)
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Praxair, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
July 26, 2018
|
|
By: /s/ Matthew J. White
|
|
|
|
|
|
|
|
Matthew J. White
|
|
|
|
Senior Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|
|
July 26, 2018
|
|
By: /s/ Stephen F. Angel
|
|
|
|
|
|
|
|
Stephen F. Angel
|
|
|
|
Chairman, President
|
|
|
|
Chief Executive Officer
|
|
|
|
(principal executive officer)
|
|
|
July 26, 2018
|
|
By: /s/ Matthew J. White
|
|
|
|
|
|
|
|
Matthew J. White
|
|
|
|
Senior Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|